The simplification promised by the tax reform, currently in the regulatory phase in the National Congress, is still far from happening. The warning comes from tax lawyer Lucas Ribeiro, CEO of ROIT, an artificial intelligence company for the accounting, tax, and financial management of corporations. “With luck, by 2033,” he says.
Ribeiro is the creator of the ‘Tax Reform Calculator,’ developed by ROIT when the reform was still the PEC 45/2019, to assist the Federal Senate in analyzing the impacts of the text. He presented its first version in a public hearing at the Senate Economic Affairs Committee (CAE), and the data was shared with the Legislature to support the work of the lawmakers.
Using resources like artificial intelligence from the data of the Public Digital Bookkeeping System (Sped) and the XML schemas of fiscal documents, the ‘Tax Reform Calculator’ now indicates that the combinations of rules currently being processed will result in up to 22.5 million new possible scenarios.
“The quantity may increase or decrease depending on the changes the project will undergo in Congress,” Ribeiro anticipates. Thus, the much-touted ‘simplicity’ to be promoted by the tax reform can only be achieved in 2033, when the transition period between the current model and the changes brought by the reform will end.
The regulation of the tax reform (Constitutional Amendment 132/2023) is currently based on two complementary bills. The first (PLP 68/2024) deals with the General Law of Tax on Goods and Services (IBS), the Social Contribution on Goods and Services (CBS), and the Selective Tax (IS). The text, submitted by the Executive to the Chamber in April, has 306 pages and 499 articles. The project foresees a rate of 26.5%, but it can vary between 25.7% and 27.3%, according to the government.
In this project, there is a point brought by Lucas Ribeiro to the federal deputies of the GT: a potential increase in PIS/Cofins collection in 2024 and 2025, ‘provoked by the Federal Government’s eagerness to collect’, could significantly raise the CBS rate, given the calculation formula indicated in PLP 68/2024.
Another project (PLP 108/2024) will address the operation of the IBS Management Committee and the distribution of IBS revenues among the federative entities, as informed by the Ministry of Finance and the Chamber of Deputies. This project was submitted by the Executive now in June.
‘The extraordinary secretary for Tax Reform at the Ministry of Finance, Bernard Appy, told the press that the new system will not require anything more than just the ‘simple issuance of an invoice’. Well, this simplification, even in this way, will only be effective on January 1, 2033, and until then companies need to survive under the two systems.’
Moreover, there are numerous impacts for companies that go beyond the tax burden. There are many changes and preparations necessary to coexist with the two systems until 2033. Especially, cash flow preparation, revision of purchase prices, selling prices, margin, management processes, and much more. ‘None of this is being said, and the entrepreneur will soon wake up with a great challenge to solve, and perhaps it will be too late,’ warns Lucas Ribeiro.
Lucas also presented the need for a “Plan B” for cases where the Split Payment (a form of IBS and CBS collection in two parts) is not developed within the desired timeframe by the government. “Everyone knows that developing software is not simple, and we may have surprises and delays,” he adds. “Taxpayers need to continue to calculate credits through the invoice until the system is implemented; it is not possible to proceed with an incomplete solution or even with the emergency purchase of a Split Payment market solution, potentially even foreign.”
In addition, in the Chamber and Senate, the texts will surely receive amendments, adding even more exceptions and peculiarities. “Will there be hundreds of new rules to be interpreted and enforced by whom? By the Tax Office alone? ‘Just issuing an invoice?’ As if it were quite easy to combine more than 2 billion possible tax scenarios to issue an invoice today, added to the millions of new rules to come,” Ribeiro points out.
It is essential that companies of all sizes and accounting and tax professionals start now to prepare in-depth impact studies and, primarily, to organize their management for the new credit and debit system of the new Value Added Tax (VAT), established by CBS and IBS, emphasizes the CEO of ROIT.
